ICICI Securities research report on Archean Chemical Industries
In our view, ACI has a plethora of opportunities – each carrying strong value creation potential – along its path ahead. Right off the bat, the expansion in bromine derivatives, and thus, higher captive bromine consumption would likely provide a strong fillip to ACI’s bromine business. Separately, Oren shall help cater to chemicals’ demand for O&G exploration services along with bromine compounds. Also, the success in its SOP floatation process could unlock extensive value. Further, its foray into SiC chip production – likely production FY28E onwards – would place ACI among the few India producers in semiconductors.
Outlook
It is also exploring a giga-factory in ZincGel batteries using zinc-bromide electrolyte, which exhibits synergies with its own bromine. In our view, the stock has little to lose due to undemanding valuations (12.8x FY27E PE). Retain BUY and TP of INR 675 (based on 15x FY27E EPS).
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